I was jogged out of my Friday night lethargy by this picture.
Aon’s master trust has just been awarded a “Pension Quality Mark” by the PLSA. I find this picture quite disturbing.
The pensions minister Guy Opperman (right) is featured with Tony Britton Head of DC DCS Sales at Aon Hewitt Consulting. I like Tony, I endorse him on Linked in for his work with Aon and previously Scottish Widows. But Tony is just a salesman.
Guy Opperman just stepped out of Swiss Tony’s showroom.
This is not how I want good governance promoted!
A master trust- as it’s name suggests – is a fiduciary concept. The point of a master trust is to provide surrogate trusteeship for a group of employers who do not want to provide trustees to set up their own schemes.
So where were the master-trustees?
Aon’s master trustees are three in number, you may find it strange that there are only three but that is allowable. I know this from Aon’s own literature.
Personally I think five is a minimum number for a trustee board, I have searched the PLSA PQM Ready Standards and though it does not say as much, I would be surprised if many advisers or trustees would expect a trustee board to have less than five members.
The Aon master trust has three trustees and they are all professional trustees- hired guns. All three pursue “portfolio careers”.
The chair, Roger Mattingly makes no bones about this on his linked in profile
“I am now on a number of trustee and governance boards of various shapes and sizes of pensions schemes and portfolios of contract pension arrangements”
There is nothing wrong with Roger, Kim Nash or Nicki Mortimer pursuing portfolio careers, provided that is, that there is someone within the Aon Master Trust, who carries the can.
Where were the Aon master trustees when the Pension Minister was giving out the gong? I suspect that they were pursuing portfolio careers.
Why does this matter?
We are entering into a period of intense scrutiny for investment consultants such as Aon, Mercer, WTW and indeed my own First Actuarial. The Competition and Markets Authority (CMA) is demanding (quite rightly) to look at our books. They are concerned about potential conflicts between organisations that market governance and profit from the assets that governance attracts.
They should be concerned about this award (an award that was first won by NOW pensions). I am very far from convinced that PQM ready is rewarding the right things or being used as much more than a marketing tool.
It matters to me that when gongs are being given out for good governance, those gongs are not being used for profit. In my opinion, the Aon Master Trust is mutton dressed as lamb. The purpose of the trust is to maximise profit for Aon and the governance is secondary.
Three trustees, the bare minimum, Hired guns (good hired guns) but not dedicated trustees. A salesman picking up the award and Aon all over the PLSA exhibition like a rash.
It matters a lot that pension consultants act responsibly. Can we really consider Aon’s master trust as a trustee driven governance structure? Until you read this article, did you have any idea who the trustees were? Do you have any idea what Mattingly, Nash and Mortimer do – have you seen one communication from the trustees that suggests that they are any more than doing what they’re paid for?
If we are to have master trusts, we need master trustees who are visible and clearly acting for members and I suggest that Aon could do a whole lot more.
More trust – less champagne
What Aon has is enormous amounts of champagne and a very big exhibition stand – which appeared to lubricate the whole PLSA exhibition.
They also have some passionate and committed tweeters – hello David Bunkle
and some quite brilliant consultants – Kevin Westbroom, Andy Cox and yes – David Bunkle! The old spirit of Bacon & Woodrow is not dead and thank God for that.
That spirit lives on , I hope, on this blog. But it does not sit well with the new Aon.For some time, Aon have been mounting a campaign to “turn off the Tap” and silence me. It is not working.
Aon are now in the public eye as never before. The FCA has rejected its special pleading and its business model is under scrutiny for all manner of reasons. It would do well to avoid exposure to conduct risk.
Such conduct risk was clearly only too evident in Manchester last week.
I was astonished to be sent a picture by twitter of an acrobat serving champagne to PLSA delegates on a trapeze!
This sales stuff is all very well but what we need right now is virtuos products and a little humility.
Instead of treating PQM ready as a sales aid, Aon should be looking at its trustee structure and looking to put some meat on the bone.
Instead of pouring champagne around as happened for three days last week, they should wake up and smell the coffee.
As for PQM Ready, it should raise its game too. If the FCA deem a minimum of five trustees, then shouldn’t PQM? Did the PQM nod through “the Aon three” without demur?
We are not dealing here in lowest common denominators, we are talking about trustees who are doing the job with a passion. I see no evidence of that with the Aon Master Trust.
I’ll end with the comments of a friend who is not directly connected with pensions who forwarded me the acrobat photo. This is how he reacted to what he saw on the #PLSAAnnual timeline.